Challenges for Europe

Challenges for Europe

Europe is a global leader in the development of Key Enabling Technologies. However, our record in translating this knowledge advantage into marketable products and services doesn't match this. KETs-related manufacturing is decreasing in the EU and patents are increasingly being exploited outside the EU.

One of Europe's major weaknesses with KETs is its difficulty converting knowledge into marketable KETs-based products and services. This innovation gap has been identified as the European 'Valley of Death'.

The lack of KETs-related manufacturing is detrimental to the EU for two reasons:

In the short term, opportunities for growth and job creation will be missed;

In the long term, there may be a loss of knowledge generation because research and development is intrinsically linked to manufacturing.

The European Strategy for KETs aims to trigger the manufacturing of KETs-based products in the EU and to reverse the decline of manufacturing in order to create growth and jobs.

The main challenges

Creating the right investment conditions and economic environment for the KETs industry to develop its manufacturing capacities in Europe

In general, KETs-based products are capital intensive. The development periods for research and innovation are long and production processes include complex assembly methods. For private investors, KETs are associated with high risks. Coupled with insufficient access to appropriate sources of risk capital in the EU (on which start-ups and small businesses are particularly dependent), this results in many innovations never reaching the market.

This type of businesses particularly needs public support for the transfer of new ideas from the laboratory to the market.

To overcome these challenges, the European Commission is working on a more effective use and coordination of public resources in order to support investments in KETs.

Reinforcing the KETs innovation capacity of SMEs

KETs offer huge opportunities to small and medium-sized enterprises (SMEs), and the Commission works to help them fully exploit these opportunities, for example by facilitating the access of SMEs to KETs technology platforms.

KETs technology platforms are public or private organisations which provide technological services to industry/SMEs such as prototyping, demonstration lines, and lab test facilities so that they can bring new KETs products and services to the market. European SMEs find it difficult to access such organisations due to their limited size or financial capacities, the preference of the platforms to work with national companies, or because the SME is not aware of the platforms that exist in their field.

Putting Europe on the path to competitiveness rests on making innovative products and products that integrate different key enabling technologies are key to this. While each individual KET already offers huge potential for innovation, their cross-fertilisation is particularly important as combinations of KETs offer even greater possibilities to foster innovation and create new markets.

The challenge is to strengthen these so-called, 'cross-cutting KETs', which means strengthening collaboration between different companies and stakeholders along the value chain.

Ensuring a level playing field for KETs

Europe is not alone in understanding the importance of KETs and many non-EU countries, particularly the United States and Asian countries, have adopted specific policies designed to attract foreign investment in KETs.

According to a Commission study, there is evidence that some measures taken by the US and Asian countries to create incentives to make them attractive to investors in KETs-related industries have resulted in the distortion of the international market.